Car Market & Buying Behaviour

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[September 12, 2007]

Table of Contents
Table of Contents2
Abstract3
Introduction3
Global scenario3
Indian scenario4
Key players in India4
Market information4
Product categorization5
Market Drivers in India5
Key Trends5
Government Policies and regulations6
Capital Investment & FDI Inflow6
Recent Innovations6
Acquisitions and JV 7
Summary7
Annexure 18
Annexure 29
Annexure 310
Reference10

Abstract
Over the past few years it has been seen that Indian Car Industry is growing at a rapid rate and has built a strong foundation for low cost manufacturing and engineering competitiveness thus attracting many global original equipment manufacturers (OEMs) like GM, Toyota, Honda, BMW, Nissan, etc., to leverage the India opportunity across the value chain. Car component industry has also grown both domestic as well as on the export front. Its strength in technology intensive parts is making India a component sourcing hub for most global OEMs. Thus this car industry is becoming one of the leading export hubs for the global community. Introduction

Since, 1991 opening of the economy has changed the face of auto industry. Today, it is amongst the main drivers of growth of Indian economy with an output multiplier of 2.24(for every Re.1 invested, auto sector gives back Rs.2.24 to the economy). In recent years we have seen increasing number of global players entering Indian market by way of Joint ventures, collaborations or wholly owned subsidiary. Sudden interest of major global players has made Indian auto industry very competitive as India provides twin benefit of ready market and Low cost manufacturing base for them. Currently Car industry constitute 14% of automobile sector in terms of unit. Global scenario

Car industry is one of the largest industries in the world, there are many players in world manufacturing cars, among those are (a) General motors, Ford in USA (b) Daimler Chrysler, Fiat, Lexus, Volkswagen, Renault, etc. in Europe (c) Toyota, Nissan, Honda, Hyundai and Suzuki, etc. in Asia. Global market for cars forecast to increase by 3.8% to 50.7 m units in 2007 - an increase of almost 1.9 m units. Biggest contribution has to come from developing Asia (excludes Japan) and the growth of that region, especially China. Contribution of the Pacific Rim countries to the growing world market is, by 2009, almost an additional five million units. Indian scenario

The PAL entered the Indian market in mid 90 with Premier car, then Maruti started capturing the Indian market with help of maruti 800 .The car industry in general has grown at a CAGR of 13.5% p.a over the last 5 years, presently, India is 11th largest passenger car market in the world and is expected to be the 7th largest market by 2016. The Car industry has emerged as a key contributor to the Indian economy; currently India has low car penetration with 3 cars in 1000 individuals. India is the fourth-largest car market in Asia. Passenger cars come in great variety, starting from 2-seater electric car REVA to 5-seater compact cars like Zen, Santro, Indica, etc. They come in all ranges– economical and luxurious. The production, sales, export figures of Indian car industry (units/annum) of last 5 yrs are given in Annexure 1 and sales, export figures ( revenue wise) and growth trend for last 5 yrs are given in Annexure 2. Key players in India

Player like Tata Motors, Maruti Udyog Limited, Mahindra & Mahindra, etc are the leading Indian manufacturers in passenger cars segment, whereas many foreign players such as Hyundai, Honda, Fiat, Ford, Toyota, Daimler Chrysler, etc are also serving the segment. Maruti is the market leader with popular brands maruti 800, zen and alto. Hyundai is second with santro ,accent etc,Tata motors is third with indica ,indigo etc, Mahindra and Mahindra is leading player in utility vehicle with scorpio, Bolero etc, Honda with brand civic.The market share, sales and export of each palyer is given in Annexure 3....
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